9911796707
TMI Blog1986 (1) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... of deceased Joseph. The father was coerced to pay the amount on 29th October, 1975, when confronted as he was with a threat of distraint for the recovery of that sum. The aggrieved father is the petitioner in the original petition, which challenges the legality of highhanded official action. 4.. Later, the petitioner was sought to be assessed as legal representative for 1973-74 and 1974-75 by the department. The tax liability was fixed for 1973-74 in the sum of Rs. 1,060 by order dated 25th October, 1976. It was a case of "nil" assessment for 1974-75. 5.. It is agreed that in respect of the amount certified for revenue recovery, no notice of demand had been served on the petitioner, prior to the recovery of the said amount from him. 6.. The contention in short was that the petitioner was not an assessee-indefault or an assessee from whom tax was payable, and consequently no recovery of tax from him was permissible under law. 7.. The learned single judge took the view that under section 20 of the Act the legal representative of a deceased-dealer is deemed to be the "dealer" himself, that the knowledge of the dealer is ascribed to the legal representative and that notice issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, A.R. Somnath Iyer, C.J., K.S. Hegde, J. (as he then was), B.M. Kalagate and Sadanandaswamy, JJ., drew a distinction between the concepts of an "assessee" and an "assessee-in-default". A legal fiction could transmute a legal representative into an assessee. Thus far and no further. The fiction did not make him an assessee-in-default; for, a legal representative to become an assessee-in-default, he should not only get transmuted as an assessee, thereafter, he should also have defaulted in effecting the payment in pursuance to a demand made on him as such assessee. In the absence of any such demand to the legal representative after he has assumed the role of the assessee, he could not be treated as an assessee-in-default. As Hegde, J., observed (at page 405): "The recovery in question cannot be made from the deceased-assessee.......... the assessee.......... denotes a person liable to pay either because his income was assessed to tax or because he is liable to pay the tax assessed. If that is so, the said person cannot be considered as an 'assessee-in-default' unless a demand notice..........had been served on him." The views of the Full Bench are expressed at page 418: "Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to be an assessee, he must be a person by whom tax or any other sum is payable under the Act or a person in respect of whom proceedings have been taken for the assessment of tax payable by him. A dealer simpliciter does not incur a liability to pay tax. Before a tax liability is cast on him, he must be assessed in the manner referred to in section 5 or other enabling provisions. Under section 23, the obligation to pay is in respect of the tax assessed or any other amount demanded under the Act, and such payment is conditioned by the various factors indicated in the section as regards the instalments and the time as specified in the notice of demand. It is only when default is made in paying the tax or other amount in accordance with the notice of demand, the whole amount outstanding on the date of default becomes immediately due. Of course, once the amount is so due, various modes of recovery could be pressed into service for realisation of the tax or other amounts due. The modes of recovery include initiation of proceedings under the Revenue Recovery Act and an application to a Magistrate, for recovering it as if it were a fine. Non-payment of the tax would entail a penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say in such matters, before the revenue official knocks at his doors and picks up his movables in purported realisation of the deceased-assessee? Such an interpretation has to be avoided ordinarily, to stave away the section from the engulfing constitutional invalidity. The section would doubtless require a reading down in such circumstances. 15.. We are clearly of the view that, in the above circumstances, a notice of demand should have been served on legal representative and there must have been a default in complying with the requirements thereof in the payment of tax, before the legal representative becomes a person from whom the tax is recoverable. Without such an antecedent demand to the legal representative, the statutory fiction does not make the legal representative or one among the legal representatives of a deceased dealer, an assessee from whom tax is recoverable by utilising the mode of recovery provided under section 23(2) of the Act. 16.. Notwithstanding the fact that the dealer becomes an assessee and the liabilities fasten on him, he does not become an assessee-in-default, unless he defaulted the payment. Such a default cannot be posited vis-a-vis the legal rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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